NEW DELHI: The National Stock Exchange (NSE) filed draft papers with Sebi for what could be the third biggest initial public offering (IPO) in India’s capital market history after the issues of Coal India and Reliance Power.

The Rs 10,000 crore issue, biggest since the Coal India IPO in October 2010, has come at a time when the equity bourse has been in the news for one or the other reason.

Just weeks before the IPO, NSE’s CEO Chitra Ramkrishna resigned after a 24-year-long association.

On December 28, 2016 the draft IPO papers noted a few observations by an independent agency, including the one that indicated potential preferential treatment to a few stock brokers by certain employees identified in the report.

Here are seven top factors you need to know about the forthcoming IPO.

Forensic report: In the DRHP, NSE cited the report of an independent agency, which recently observed that a few of the company’s employees potentially gave preferential treatment to a few stock brokers.

According to the agency, different stock brokers were treated differently and there was no uniform approach applied across stock brokers with respect to allocation of new IPs across ports on existing servers and movement from one server to another. The agency stated that it was not in a position to comment on whether this would amount to “collusion or connivance,” the company in a filing to BSE said.

Any adverse directive from Sebi on this matter may materially and adversely affect our co-location business, operations, business and reputation, NSE said.

Issue size: NSE intends to sell up to 111,411,970 equity shares, constituting 22.5 per cent of the company’s post-offer paidup equity share capital. It is an offer for sale (OFS), which means existing shareholders will offer their shares in the issue. The issue size, pegged at Rs 10,000 crore, will eclipse ICICI Prudential’s Rs 6,000 crore IPO concluded recently, but will fall short of Coal India’s Rs 14,475 crore IPO launched in October 2010.

Who owns what? Top 10 shareholders of NSE account for 70.10 per cent of the total holding in the exchange. The biggest shareholder is LIC, with a 12.5 per cent stake. SBI and SBI Capital Markets own 5.2 per cent and 4.3 per cent, respectively.

In July, Sebi sold a 5 per cent stake in the bourse to Veracity Investments for Rs 911 crore, valuing NSE at around Rs 18,200 crore. The company on November 24 issued bonus shares in the ratio of 1:10.

If the issue price band confirms the estimated size of the issue at Rs 10,000 crore (Rs 40,000-Rs 45,000 crore m-cap), it would result in big gains for Mauritius-based Veracity Investments, which though will not be among the selling shareholders in the forthcoming issue.

Aranda Investments Gagil FDI, IFCI and Stock Holding Corporation of India are some of the other prominent shareholders in NSE. IDBI Bank and IDFC were among NSE’s shareholders two years ago.

LIC won’t sell shares: A total of 27 NSE shareholders will be looking to offload shares, with Tiger Global Five Holdings (1.48 crore), Aranda Investments (99 lakh), SAIF II-SE Investments Mauritius (99 lakh), GAGIL FDI (86.62 lakh) and Norwest Venture Partners X FII – Mauritius (78.37 lakh) offloading the maximum number of shares. IDBI Bank, which is not among top shareholders, will sell 74 lakh shares. Besides, SBI, SBI Capital Markets and Bank of Baroda will offload shares in the mega issue. LIC is not on the sellers’ list.

Industry standing: In FY16, NSE enjoyed 85 per cent share of the total industry-wide turnover in the equity cash segment. The bourse accounted for 94 per cent of trading in equity derivatives and 59 per cent in currency derivatives as of FY16. In addition, it held 79 per cent market share in interest rate derivatives, 77 per cent in ETFs and 80 per cent in corporate bonds during FY16.

Financials: The company recorded nearly 7 per cent CAGR growth in total income to Rs 2,359 crore in FY16 from Rs 1,801 crore in FY12. Net profit after tax for the exchange grew 2.48 per cent compounded annually to Rs 975 crore in FY16 from Rs 884 crore in FY12. The company’s net worth as of September 30 stood at Rs 7,057 crore. The bourse had cash and cash equivalents and bank balances of Rs 8,937 crore as of September 30, 2016, respectively.

Revenue mix: Trading business accounted for nearly half of the company’s revenue against BSE’s 27 per cent in FY16. Here’s how the bourse’s revenue mix differs from exchanges globally.

A recent Allahabad high court judgment may, however, provide some relief with the court ruling that there shall be no tax levied in case of purchases made at duty free stores at the arrival or departure terminals.